Weekly Update 18 June 2017 – LS Trader

The past week has seen mixed trading in many markets, especially in stocks and currencies. Interest rate futures have had a fairly bullish week and pushed to new highs for the current move. Commodities markets have seen some decent moves in a handful of markets.

Stocks

The S&P 500 fell just short of a new all-time high but continues to trade in a very narrow range between all-time highs and short-term support. The long-term trend remains up.

The Nasdaq 100 ended the week lower and was unable to make any progress into the large bearish bar that we discussed last week. As we wrote previously, it will take a significant move to reverse that sell-off which occurred on very high volume, thereby leaving a significant bearish footprint on the chart

The Dax has made no progress over the past six weeks and continues to undergo volatility compression. The RSI is also moving sideways just above the 50 level indicating a lack of directional trend. The Nikkei is also trading sideways, hovering around the 20,000 level.

Commodities

From last week following Gold’s failure to break key resistance: “That price action was not a valid breakout, and the failure could even be argued as being bearish, not bullish. Price needs to cross and ideally close above $1300 to confirm the breakout.” Gold continued with weakness this week and has closed below the 50-day moving average but has also found support right on the 200-day MA. Volatility is also undergoing significant compression.

Silver remains weaker than Gold and remains in a long-term downtrend having been unable to complete a change of long-term trend to up. There’s a possibility of a breakout through support over the coming weeks.

The energy markets saw further weakness this week as prices fell to new lows for the year in a couple of markets in the sector. Crude Oil bounced from just ticks above support, but that level may be tested this week. The trend remains down for energies.

Currencies

The dollar has had a mixed week as the dollar fell to new lows basis the Dollar Index but then reversed higher to test resistance. The long-term trend is down for the dollar.

The Euro traded inversely to the Dollar Index and just narrowly held above support. Friday’s bullish piercing line keeps the uptrend intact for now, but there’s a good possibility that support will be tested again on the Euro as will resistance on the dollar index.

The British Pound gained a little ground this week following the battering it took after the General Election. Price has so far been unable to close back above the 50-day MA, but the long-term trend is still technically up.

Although we had rolled our open currency trades forward to the September contract during the previous week, the June contract expired this week, leading to the usual spike in volume. This spike can be ignored as it is just the normal rollover volume.

Interest rate futures

Interest rate futures tested support and pushed higher to post new highs for the current move. The longer-term markets continue to outperform the shorter-term interest rate futures, but the entire sector remains in an uptrend.

UK Long Gilts have seen some price swings this week having posted new highs for the move, but falling just short of the all-time highs printed back in August last year. Subsequent price action saw Gilts pull back and test support once again. We may see support and the 50-day MA tested again this week, but the trend remains up.

Good trading

Phil Seaton

LS Trader

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